FRAMINGHAM, 19 NOVEMBER 2010 - The electricity market in Texas is one of the most competitive in the United States, thanks to industry deregulation that began in the early 2000s. While electric utilities in other states dominate specific geographic regions, those in Texas compete across most of the state. TXU Energy, a subsidiary of $9.5 billion Energy Future Holdings, knew it couldn’t win on price alone. “On any given day, a customer can choose who to buy energy from,” says Kevin Chase, the company’s vice president and CIO.
Executives decided they would meet this challenge by transforming the arm’s-length relationship TXU Energy had with its customers. In 2009, it launched the Customer Acquisition Relationship Engine (CARE), an SAP-based system that replaced 179 mainframe and client/server applications. CARE supports more than 2 million customers, delivering more and better data about their electricity usage to sales and customer-service agents, and to customers themselves.
According to a study by Accenture, consumers increasingly want to control and reduce their electricity consumption, whether to save money or help the environment. Through CARE, TXU Energy has opened up account data to customers so that they can refine their electricity use and meet their budget goals. TXU Energy also sells iThermostat, an Internet-enabled thermostat that lets customers adjust their heat through an online portal, saving up to $360 per year.
Power to the People
Meanwhile, TXU Energy and other Texas energy companies are about one-third of the way through a five-year project to install digital “smart” meters for all customers. The meters measure a customer’s electricity use in 15-minute increments. While some utilities, such as Pacific Gas and Electric in California, started installing smart meters earlier, TXU Energy’s efforts are comparable to those of other utilities in Texas, says Adam Cooper, an analyst at the Edison Foundation, a nonprofit research group.
TXU Energy customers can go online to query the company’s SAP system about this usage data, and may access billing information online or through an interactive voice-recognition phone system. A customer can ask, for example, how much electricity he uses between 8 p.m. and midnight or, using the iThermostat portal, pose what-if questions to see the financial impact of changing thermostat settings. He can also ask a customer-service agent to walk him through various scenarios. Once customers get used to these features, Chase says, “they won’t want to leave, not for half a cent less in price for a given month.”
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